Johnson & Johnson to Pay More than $2.2 Billion in Civil and Criminal Settlements

Health care giant Johnson & Johnson and its subsidiaries will pay more than $2.2 billion to resolve criminal and civil cases arising from allegations relating to the drugs Risperdal (risperidone), Invega (paliperidone) and Natrecor (nesiritide). The allegations include promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and payment of kickbacks to physicians and to Omnicare Inc., the largest pharmacy provider to nursing homes.

The global resolution is one of the largest health care fraud settlements in U.S. history, with criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states totaling $1.72 billion, according to a news release from the Department of Justice.“The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust,” said Attorney General Eric Holder. The resolution includes criminal fines and civil settlements based on the False Claims Act arising out of multiple investigations of the company and its subsidiaries.

The government has charged that Janssen Pharmaceuticals Inc., a J&J subsidiary, introduced the antipsychotic drug Risperdal into interstate commerce for an unapproved use, rendering the product misbranded. Risperdal was approved only to treat schizophrenia, but the government alleges that Janssen’s sales representatives promoted Risperdal for use with elderly dementia patients to treat such symptoms as anxiety, agitation, depression, hostility and confusion. The government says the company created written sales aids that mentioned these symptoms but minimized mention of the FDA-approved use, the treatment of schizophrenia, according to the news release. The company also provided incentives for off-label promotion by basing sales representatives’ bonuses on total sales of Risperdal in their sales areas, not just sales for FDA-approved uses.

In a complaint filed in the Eastern District of Pennsylvania, the government alleges that J&J and Janssen were aware that Risperdal posed serious health risks for the elderly, including an increased risk of strokes, but that the companies downplayed these risks. The complaint also alleges that Janssen knew that patients taking Risperdal had an increased risk of developing diabetes, but nonetheless promoted Risperdal as “uncompromised by safety concerns (does not cause diabetes),” according to the Justice Department.